China seized hotel owner Anbang two years ago

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The Spa Montage lap pool has been updated to a salt-based pool. The Montage Laguna Beach was named the top O.C. Resort as part of our 26th annual Best of OC awards. (Photo courtesy of MLB Architectural)

Dogs and people socialize in 2014 at a Yappy Hour at The Ritz-Carlton in Laguna Niguel. (Photo by Cindy Yamanaka, Orange County Register/SCNG)

EnoSteak is an intimate steakhouse nestled into the wine cellar at The Ritz-Carlton Laguna Niguel (Photo by Brad A. Johnson, Orange County Register/SCNG)

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Montage Laguna Beach has finished a property-wide renovation that touched most aspects of the luxury, cliff-top beach resort. All 253 guest rooms, including suites and bungalows, were re-designed. Some of the upgrades include polished marble floors, chrome accents and new vanities in guest bathrooms. New room features include streaming, 55-inch and 65-inch 4K televisions, and the Pressreader app for access to worldwide newspapers and magazines. The Spa Montage lap pool also has been updated to a salt-based pool. (Photo courtesy of MLB Architectural)

Montage Laguna Beach has finished a property-wide renovation that touched most aspects of the luxury, cliff-top beach resort. All 253 guest rooms, including suites and bungalows, were re-designed. Some of the upgrades include polished marble floors, chrome accents and new vanities in guest bathrooms. New room features include streaming, 55-inch and 65-inch 4K televisions, and the Pressreader app for access to worldwide newspapers and magazines. The Spa Montage lap pool also has been updated to a salt-based pool. (Photo courtesy of MLB Architectural)

Anbang acquired its three Southern California luxury resorts, including the Loews Santa Monica, in 2016 with its purchase of 15 of 16 hotels owned by Strategic Hotels & Resorts of Chicago. The pool view at the Loews. (Casey Rodgers / AP Images)

According to numerous media reports, a $5.8 billion deal to sell 15 U.S. hotels has fizzled into litigation. That means ownership is in question for Montage Laguna Beach, Ritz-Carlton Laguna Niguel in Dana Point, Loews Santa Monica, Ritz-Carlton Half Moon Bay, Four Seasons Hotel in East Palo Alto and Westin St. Francis in San Francisco.

The Chinese government has been trying to rid itself of hotels after it seized the financially ailing Anbang insurance empire two years ago. A deal to sell the 15 Anbang lodging assets to South Korea’s Mirae Asset Global Investments has collapsed.

Mirae said Monday it terminated the deal, announced in September after Anbang breached its contractual obligations.

In return, Anbang is suing Mirae in the United States, saying the termination was improper. Mirae “categorically denies Anbang’s claims,” the company replied.

Anbang acquired the California luxury resorts in 2016 with its purchase of 15 hotels owned by Strategic Hotels & Resorts of Chicago. Anbang first gained the international tourism spotlight by buying New York’s famed Waldorf Astoria hotel in 2014.

For example, the Montage was flipped three times in a two-year period. Strategic Hotels bought Montage in 2015. Then Strategic soon sold itself to New York investors Blackstone. Then Blackstone sold Montage and other Strategic hotels to Anbang.

Assuming that Anbang’s 15 hotels are back on the market, the timing could not be worse. With global travel at a near standstill due to coronavirus business limitations, most hotels are shut or nearly empty.

It’s a sharp contrast to what had been a hot market for California hotels. Last year, hotel buyers spent $6 billion, according to the Atlas Hospitality Group consultancy. That was up 7% in a year, the fourth-highest volume. That cash changed hands in 297 deals, up 6% but below the five‐year average of 331 deals.

“There are very few players that have the funds to take on a deal of this magnitude,” says Alan Reay, Atlas president, of Anbang’s 15-hotel collection. “Maybe a sovereign fund from the Middle East? But they have now been crippled by the collapsing oil market. There are a number of distressed funds but the pricing would have to be substantially lower for them to jump in, probably at least 30% lower than where Mirae was at.”

Seven retailers are now open for in-store shopping and services at Santana Row, while six restaurants are now open for outdoor dining, according to Federal Realty, the principal owner of the mixed-use commercial complex.